Practice Problem: Inventory Valuation- LCM and LCNRV Weldon Animal Feeds has developed the following data to...

Transcribed Image Text:

Practice Problem: Inventory Valuation- LCM and LCNRV Weldon Animal Feeds has developed the following data to calculate lower of cost or market for its products. The individual products are listed individually among their categories of feed (in thousands): Selling Price Cost to Cost Replace Large animals: Cattle $320 $160 $170 Horse 400 400 325 Small animals: Cat $360 $320 $280 Dog 120 90 40 Exotic pets: Ferret Iguana $140 70 $112 $98 48 21 The disposal costs are 20% of the selling price and the normal profit margin on all feed is 25% of the selling price. Required: Determine the end of year adjustment under: (a) Lower of Cost or NRV (b) Lower of Cost or Market Practice Problem: Inventory Valuation- LCM and LCNRV Weldon Animal Feeds has developed the following data to calculate lower of cost or market for its products. The individual products are listed individually among their categories of feed (in thousands): Selling Price Cost to Cost Replace Large animals: Cattle $320 $160 $170 Horse 400 400 325 Small animals: Cat $360 $320 $280 Dog 120 90 40 Exotic pets: Ferret Iguana $140 70 $112 $98 48 21 The disposal costs are 20% of the selling price and the normal profit margin on all feed is 25% of the selling price. Required: Determine the end of year adjustment under: (a) Lower of Cost or NRV (b) Lower of Cost or Market